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Agenda Item # 23.X.

BOARD MEMORANDUM

RECOMMENDATION:

Adopt a resolution declaring and determining that public interest and necessity demand the immediate expenditure of public money to procure and install air conditioning equipment in an amount not to exceed $100,000 without requiring a competitive bid and finding that such a procurement is an emergency that will not permit a delay that would result from a competitive solicitation for bids. 

BACKGROUND:

A 30-ton air conditioning unit located on the roof of Building B at the River Oaks Administrative Facility failed on July 18, 2003 and it was determined it would not be cost effective to repair the unit.  Temperatures in the month of July have been unusually hot and predictions for the coming weeks indicate more hot weather is expected.  During the summer months, temperatures in interior office spaces can reach 90 degrees and above.  Staff believes this presents an unhealthy work environment, and prompt action is required to mitigate or prevent impairment of health and essential public services.   

Based on a recent procurement of a similar sized air-conditioning unit, the cost to replace and install an air conditioning unit of this size is estimated to be approximately $100,000.  Public Contract Code section 20301 requires that VTA formally compete any equipment purchase greater than $25,000.  Public Contract Code sections 20303 and 22050 provide an exception to this requirement in cases of emergency, if the Board of Directors makes appropriate findings and approves a non-competitive procurement by a four-fifths vote. 

DISCUSSION:

Normally, items of this type would have been incorporated as specific preventive maintenance capital procurements in the adopted budget.  Due to our fiscal crisis this year, we were forced to take a wait until it breaks approach and simply establish a contingency to address these issues.  It is not our preferred approach.

In January of 2003 VTA conducted a formal bid process for the procurement and installation a 30-ton air conditioning unit.  N.V. Heathorn, Inc. (Heathorn) was the low bidder.  Heathorn has agreed to provide the 30-ton air conditioning unit currently needed at the River Oaks Administrative Facility for $39,500, the same price bid in January of this year.  Heathorns quote for other associated costs (engineering, installation labor, tax and crane) is $20,500 and compares favorably with the bid from January.  Additionally, $40,000 is needed for possible structural enhancements and roof repair.  Units of this size are not kept in inventory and the manufacturing lead-time is five to six weeks. 

This new unit will have a cost payback in approximately five years because of maintenance and energy savings. 

ALTERNATIVES:

Consideration was given to repair the unit at an estimated cost of $36,500.  However, staff determined that the minimum time to make repairs would take between two and four weeks due to the need to find parts for this unit which is approximately 22 years old.  If the repairs were made, the unit would remain at 1981 efficiency standards and would be 50% less efficient as compared to a new unit.  This is not a practical alternative because of the higher energy usage and repair costs involved and the minimal timesavings in getting the unit back in operation.

FISCAL IMPACT: 

Funding for the procurement and installation of this 30-ton air conditioning unit is available from the FY 2004 Facilities and Equipment Emergency Repair Allowance Capital Project.  The cost of this project may be reduced as much as $10,000 if VTA can qualify for a rebate under PG&Es Business Equipment Rebates: Express Efficiency Program, assuming funding is available. 

Based on the limited scope of work and no subcontracting opportunities, no specific goal has been established for this contract.  Contractor is encouraged to make reasonable efforts to utilize DBEs in its procurement of ancillary services and products associated with the performance of this contract.

Resolution No.  ________________ 

RESOLUTION OF THE BOARD OF DIRECTORS OF THE SANTA CLARA VALLEY TRANSPORTATION AUTHORITY (VTA) AUTHORIZING THE EMERGENCY PROCUREMENT AND INSTALLATION OF AN AIR CONDITIONING UNIT FOR BUILDING B OF THE RIVER OAKS ADMINISTRATIVE FACILITY

WHEREAS, on July 18, 2003 an air conditioning unit servicing a portion of Building B the VTA River Oaks facility failed; and

WHEREAS, outside temperatures have been in the 90s for many days during the month of July and are expected to continue at this level for the months of August and perhaps September; and

WHEREAS, the Board hereby determines that the failure of the air conditioning unit during the hottest months of summer is an emergency as defined under Section 1102 of the Public Contract Code; and

WHEREAS, it has been determined that the unit cannot be swiftly repaired but needs to be replaced; and

WHEREAS, the Board hereby finds, based in the report attached hereto dated July 30, 2003 that 1) the emergency will not permit a delay resulting from a competitive solicitation for bids for a replacement air conditioning unit, and that 2) the immediate purchase of one 30-ton air conditioning unit for Building B, is necessary to respond to the emergency;

NOW THEREFORE, BE IT RESOLVED by the Board of Directors of the Santa Clara Valley Transportation Authority that:

Section 1.  The public interest and necessity demand the immediate expenditure of public money to purchase a replacement 30-ton air conditioning unit for Building B at the VTA River Oaks facility to safeguard life, health, or property.

Section 2.  The General Manager is hereby authorized and directed to contract for the procurement and installation of the necessary equipment without the necessity of soliciting competitive bids.

PASSED AND ADOPTED by the Santa Clara Valley Transportation Authority Board of Directors on August 7, 2003, by the vote of four-fifths of the members of the Board of Directors as follows:

AYES:                  

NOES:                  

ABSENT:    

ATTEST:

______________________________
SANDRA WEYMOUTH, Secretary
Board of Directors

APPROVED AS TO FORM:

______________________________
Suzanne B. Gifford, General Counsel

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